Hi-Tech Short-Circuit
PRESIDENT Bush is undercutting strategic commercial technologies in the computer, telecommunications, and electronics industries. Bowing to ideology and high-powered lobbying, Mr. Bush is presiding over the erosion of America's largest industries in dollar volume and jobs. High resolution television is at the heart of these technologies, because it converges the computer, television, and telecommunications industries. High resolution televisions will use large, flat screens, computer chips and circuits, video cassette recorders, fiber optic networks, and satellites. Excluding spin-offs in computers, some experts value the high resolution TV market at $136 billion by 2000.
Japanese economic planners and industrialists targeted this critical growth sector long ago. They have invested $2 billion in high resolution television so far and do not want to lose the market to an awakened United States.
Craig I. Fields was director of the Defense Advanced Research Projects Administration (DARPA), the agency charged with high resolution research and development. His firing was the latest skirmish in the battle for strategic commercial technologies. Until April, Dr. Fields administered $30 million Congress authorized for high resolution television systems as part of a $1.2 billion agency budget.
Alone among civilian Pentagon managers, Fields grasped that advanced video technologies will profoundly affect industry, employment, trade, and defense as the cold war thaws and as Europe and Japan emerge as both international competitors and critical investors in the US. Fields supported high resolution technologies to keep Pentagon costs down, to avoid dependency on foreign suppliers, and to provide seed funds for US strategic technologies that have broad commercial applications.
DARPA funded advanced technologies for national defense. Many recipients went on to develop strategic commercial technologies. DARPA launched the semiconductor industry, stimulated parallel processing computers, initiated telephone lines that handle electronic mail, and funded artificial intelligence.
Despite DARPA's accomplishments, the White House wanted it to fund military technologies exclusively. In April, Fields awarded $4 million to California-based Gazelle Microcircuits from other funds Congress authorized, enabling DARPA to recoup investments. The Gazelle contract lets DARPA to profit from initial stock sale or from royalties on Gazelle's gallium arsenide chips in computers and fiber optic networks. The deal makes taxpayers money, and enables Gazelle to attract private capital and launch mass production. NASA has had similar authority for years.
When news reports emphasized DARPA's investment saved Gazelle from Japanese acquisition, DARPA critics blasted the award as ``industrial policy.'' Pentagon managers above Fields transferred him.
Aggressive lobbying at the highest levels of the Bush administration by former high ranking Nixon-Ford and Reagan administration officials advancing their clients' domination of US commercial technology markets and by retired Army and Navy brass peddling Japanese technology doomed Fields' fledgling program. Anxieties abound that Japan might cutback on Treasury bill purchases if Bush supports US strategic commercial technologies. Reduced cold war tensions also raise questions about Pentagon R&D when an ally, Japan, can supply these technologies.
Fields' dismissal will demoralize the highly competent DARPA staff and signal Silicon Valley innovators to sell to the next international venture capitalist walking in their door. Long-term effects will determine how the US will stimulate strategic commercial technologies. As Congress investigates the Fields fiasco, it should look at:
Japanese plans for patent monopolies on high resolution television and strategic commercial technologies in the 90s through scuttling US research and development and by purchasing US start-ups;
Pentagon dependence on foreign suppliers for high resolution displays;
Commerce Department initiatives to establish a civilian DARPA;
reluctance of US technology firms to comment publicly for fear their stock prices will fall or that suppliers will retaliate by cutting off essential component technology;
weakened university research and development when internationally controlled firms transfer R&D abroad;
and anxieties Bush is selling out strategic US commercial technologies in return for larger Japanese purchases of American cigarettes and forest products.
Given extensive government support for strategic commercial technologies in Europe and Japan, the US must create new public-private mechanisms to develop computer and communications technologies and to enable those technologies to attract private capital to leap from prototype to volume production.
